Abstract. In this paper we analysed and compared efficiency results in the banking industry using two different approaches: financial indicators and the Data Envelopment Analysis (DEA) methodology. In the indicator-based approach, we used chosen accounting ratios (Return on Assets -ROA, Return on Equity -ROE and Cost to Income Ratio -CIR) and the descriptive statistics methodology to conduct analysis. In the case of DEA, a nonparametric linear programming methodology approach, expenses as input data and income as output data are used for measuring efficiency using the CCR DEA model, BCC DEA model and window analysis DEA technique. The objective of this research is ascertain whether a correlation exists between the results of the different ways of measuring efficiency. In that sense, the main purpose of this research is to draw a more precise conclusion about the efficiency of the banking industry, as tested for the period 2008-2012 on a sample of 28 European banking systems.The main difference in the obtained results is a lag of values of average accounting ratios in comparison to the results of the DEA methodology. Such a finding suggests that the DEA methodology can be useful in detecting early signs of inadequate business strategies, which can lead to the slowdown of business activity or poorer efficiency results. This can be especially important in times of an unstable financial or macroeconomic environment, as it can assist in detecting early signs of a crisis. In general, the results of both approaches suggest that banking systems in post-transition countries have a higher cost efficiency. Such systems continue to be dominantly financed through long-term deposits and are also exposed to a specific risk. They do business in a specific competitive, financial and macroeconomic environment that significantly influences the prices of financial services (i.e. higher margins), and as a consequence, leads to potentially higher banking sector earnings.
Reverse mortgage as Þ nancing technique intended to seniors is originally and dominantly used in the USA. Homeownership is the main precondition for its usage and in the last ten years is spreading over the rest of the world and in some member states of the European Union. In European union, home equity release or reversion schemes intended to seniors, without home selling or moving, are realised through two speciÞ c mortgage Þ nancing models, loan and sale model. Loan model under equity release scheme in that sense is lifetime mortgage which is the most similar to the reverse mortgage technique in the USA. In the paper there are analysed speciÞ c money withdraw models on the basis of home equity value intended to senior population, with special remarks on credit model or lifetime mortgage. Lifetime mortgage in that sense includes neither home selling nor traditional loan repayment, all until death or moving of borrower. The main goal of this research is to point out the main advantages and disadvantages of different money withdraw models under equity release schemes and their presence on the European Union market with remarks on the factors that indicate wider usage potential and potentially could have stronger inß uence on the further development trends in this part. Descriptive statistics and correlation analysis are used for the purpose of analysis of home equity release usage and its potential in Þ nancing among older population. The results of analysis would help in bringing more precise conclusion about credit model of equity release and its role in solving Þ nance problem of senior homeowners.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.